The Actuaries Institute has called on policymakers to overhaul superannuation fund ‘dashboards’ to give consumers better information.
Super fund dashboards were originally mandated to help consumers compare superannuation funds, including based on risk, return, fees and costs. But the Institute says the current dashboards are “technically unsound and need to be amended”.
Andrew Boal, Convenor of the Institute’s Superannuation Practice Committee, said: “In a climate where consumers need more transparency from financial services providers, our concern is that consumers are making decisions affecting their financial future based on information that may not be meaningful to their needs. The current dashboards provide limited help to consumers and, in some instances, may even mislead them into making decisions that will ultimately reduce their retirement benefits.”
“Our position is based on a careful review of the current MySuper dashboard structure and we hope that regulators will take notice of our concerns. In particular, the separation of investment fees and costs from administration/advice fees and costs is critical to member understanding of the value they receive from their superannuation fund. Including examples based on several different sized account balances is also important to help members understand the different impact on their retirement savings of dollar based versus asset based fees and costs,” he said.
“It is also extremely important that policymakers shift the current focus on the dashboards away from solely short-term investment risks to include a longer term investment risk measure which is far more important to most members.”
Suggestions from the Actuaries Institute to improve super funds dashboards include using the same form of dashboard for both MySuper and Choice super products, introducing a long-term investment risk measure, stopping disclosure based on only ‘total fees’ – splitting investment fees and administration costs, and simplifying the description of fees and returns “by removing unnecessary and confusing jargon”.